- Newcomers – flat tax regime
To attract HNWI into Italy, new residents may apply for a “flat tax regime”. Under such regime:
- incomes produced in Italy are subject to tax according to ordinary rules; and
- incomes produced outside Italy will be subject to a flat tax of 100k€ per year.
The “flat tax regime” is optional and is applicable to individuals that were not resident in Italy for tax purposes for at least nine years out of the ten years preceding the first year of effect of the option .
In addition, in case of option for the flat tax regime:
- taxes on assets held abroad are not due; and
- assets and rights held abroad are exempted from inheritance and gift taxes.
The option has a 15-year duration, is revocable but it is not renewable.
During the period of validity of the option the “flat tax regime” may be extended by the individual (the principal) to one or more family members. For each member of the family the flat tax is equal to 25k€ per year.
Workers who transfer their tax residence to Italy may apply for a special tax scheme if they meet the following conditions:
- they not have been resident in Italy in the 2 tax periods prior to the transfer;
- they undertake to remain tax resident in Italy for at least 2 years; and
- the working activity is carried out mainly in the Italian territory.
Under the special scheme, income from employment is subject to taxation only on 30% of its amount (i.e., being the remaining 70% exempt from taxation).
This regime also applies to workers who set up a business activity in Italy.
In case of workers who transfer their residence in one of the regions of southern Italy (i.e., Abruzzo, Molise, Campania, Puglia, Basilicata, Calabria, Sardinia, Sicily), the threshold of exemption is increased to 90%.
Specific rules apply in case of professional sportsmen.
The special scheme is generally applicable for 5 tax periods and may be extended for additional 5 tax periods, if certain conditions are met.
- Foreign source pension income
Individuals with foreign sourced pension income who transfer their residence in certain areas of Italy may benefit from a flat tax rate of 7% on the overall foreign income., whilst Italian sourced income is subject to taxation according to ordinary rules.
In particular, this regime applies to individuals who:
- are entitled to receive foreign pension income;
- transfer their residence in a municipality of southern Italy (i.e., in the Regions of Sicily, Calabria, Sardinia, Campania, Basilicata, Abruzzo, Molise and Puglia) with a population not exceeding 20,000 inhabitants or in a municipality affected by certain eligible seismic events;
- have been tax resident abroad for at least 5 tax periods prior to the one in which the option becomes effective;
- transfer their residence from countries with which administrative cooperation agreements are in force.
In case of option for this regime also taxes on assets held abroad are not due.
The option is valid for 10 tax periods.
Social Media cookies collect information about you sharing information from our website via social media tools, or analytics to understand your browsing between social media tools or our Social Media campaigns and our own websites. We do this to optimise the mix of channels to provide you with our content. Details concerning the tools in use are in our privacy policy.